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Guide to Safe Agreements for Future Equity Introduction: Safe Agreements for Future Equity (SAFE) have become increasingly popular among startups and investors as a flexible and efficient way to secure funding without immediately determining the company's valuation. Understanding SAFE Agreements: Flexibility in Valuation: SAFE agreements postpone the valuation discussion until a future financing round or a triggering event. This allows startups to focus on growth without the pressure of establishing a valuation at the early stages. Convertible Nature: SAFEs convert into equity upon the occurrence of a predefined triggering event, typically the next financing round. This conversion can happen at a discount or with a valuation cap, offering early investors favorable terms. Simplicity and Speed: SAFEs are simpler and faster to execute compared to traditional equity financing. This makes them an attractive option for startups looking to streamline the fundraising process. Key Components of a SAFE Agreement: Valuation Cap: The valuation cap sets a maximum limit on the valuation at which the SAFE converts into equity. This protects early investors from potential dilution if the company's valuation skyrockets in subsequent rounds. Discount Rate: The discount rate provides early investors with a predetermined discount on the share price compared to later investors in the subsequent financing round. This incentivizes early backers by offering them a more favorable conversion rate. Triggering Events: Common triggering events include the company's next equity financing round, a change of control, or an initial public offering (IPO). Clearly defining triggering events is crucial to avoid ambiguity and ensure a smooth transition to equity. Considerations for Startups: Balancing Dilution: While SAFEs provide flexibility, startups should carefully consider the potential dilution to existing shareholders upon conversion. Balancing the benefits of quick funding with the impact on ownership is essential. Communication and Transparency: Open communication with investors is key. Clearly articulate the company's growth plans, and keep investors informed about milestones and developments that may trigger conversion. Considerations for Investors: Due Diligence: Investors should conduct thorough due diligence on the startup's business model, team, and market potential. Understanding the company's trajectory will help in assessing the likelihood of triggering events. Risk Assessment: Assess the risk factors associated with SAFE agreements, including the potential for dilution and the company's ability to reach triggering events within a reasonable timeframe. visit mylegalpal.com to get assistance with your SAFE agreement drafting. #SAFE #equityinvestment #agreement #mylegalpal

What are pay-to-play provisions? Why would a company engage in a pay-to-play scenario? Get insight from the firm's ScaleUp hub for entrepreneurs and investors. https://lnkd.in/emkDEPB7

Valuation plays a crucial role in determining the worth of your company, and Gateway Financials is here to guide you through the process✨ - Pre-money Valuation: Discover the estimated value of your company before receiving any funding. This valuation helps investors assess the potential of your business and decide if it's worth investing in. - Post-money Valuation: After a round of funding, your company's value is determined by adding the pre-money valuation to the funding received. Gateway Financials helps you calculate your post-money valuation accurately, giving you a clear picture of your company's worth. Unlock the true potential of your startup and make informed decisions about funding, growth, and investment opportunities. #StartupValuation #GatewayFinancials #BusinessWorth #InvestmentOpportunities #FinancialAnalysis #BusinessGrowth #StartupSuccess

CEOs and Investors: Let’s get together In-Person We’re hosting a new IN-PERSON event, and we’d love to see you there. Join us for CEO- Investor Forum by Pismo Ventures and Withum, January 31, 2024 at 5:30 PM. The CEO-Investor Forum is designed to facilitate connections and collaboration between CEOs and investors to breakdown barriers, foster open communication and build relationships. It is educational with the objective to help founders navigate their startup journey. • Presentation by Withum on Qualified Small Business Stock • Investor Panel: Xandra Laskowski (OSEA Angels), Pat Hwang (Tech Coast Angels), Greg Buchert, MD (MEDA Angels), and Jeff Bocan (Okapi Capital VC) - moderated by JJ Richa (Pismo Ventures) • Pitch event: Only 7 startups will pitch chosen from the first 15 applications Founders and CxOs of scalable startups looking for Investors, VCs, and Angels and to learn more about what it takes to build and grow your business, Register soon because space is limited. Investors, Angels, VCs, and Family Offices join us to meet startups and entrepreneurs. Register soon because space is limited. #startups #startups #entrepreneurs #angels #investors #VCs #capitalraise #investing #founders

Our Founder & CEO, Yael Benjamin, provides key insights in the recent Inc. Magazine article, "How Startup CFOs Are Preparing for a Tighter Funding Market." Yael shares strategies for navigating funding challenges, outlining a roadmap for financial resilience. For a comprehensive view, explore our latest report, "The Finance Pulse," offering data-driven perspectives tailored to startup financial landscapes. The Finance Pulse report>>>https://lnkd.in/dBREAjjv https://lnkd.in/dc8ZXswB #financegoals #startupfinance #techfinance #startupecosystem

Hello everyone! I wanted to show this article by my colleague Jason Bovell, a highly recognized CPA and Tax Specialist. If you have just started a business or have an idea that you want to pursue as a startup, you will need funding to get the operation up and running, Please read this article and learn how to approach your Funding strategies. Feel free to reach out to Jason Bovell, CPA and his team for accounting, specialized tax preparation, and business management and structuring. Visit Bovellfinancial.com Specialties: Federal and International Tax. Income Tax Accounting Accounting and Finance "Based on this data, startups and established businesses must be prepared to face a climate where funding will require grit and a solid strategy. Both will need to make sure all raises show a clear strategy of where the capital will be deployed and how it will be responsibly managed. Also, both startups and established businesses should look into shrinking operational costs as well as increasing margins. Finally, for established businesses, debt may be the more viable option as equity raises have become more costly."

Valuation plays a crucial role in determining the worth of your company, and Gateway Financials is here to guide you through the process✨ - Pre-money Valuation: Discover the estimated value of your company before receiving any funding. This valuation helps investors assess the potential of your business and decide if it's worth investing in. - Post-money Valuation: After a round of funding, your company's value is determined by adding the pre-money valuation to the funding received. Gateway Financials helps you calculate your post-money valuation accurately, giving you a clear picture of your company's worth. Unlock the true potential of your startup and make informed decisions about funding, growth, and investment opportunities. #StartupValuation #GatewayFinancials #BusinessWorth #InvestmentOpportunities #FinancialAnalysis #BusinessGrowth #StartupSuccess

How are startup CFOs are preparing for a tighter funding market? My latest article in Inc. Magazine highlights some of the data points from the latest Startup Snapshot research report "The Finance Pulse", giving a sneak peek into the balance sheets of private tech companies (valuations, budgets, hiring and more) Full report available at: https://lnkd.in/dxK4ByB4 Data was collected in partnership with Intel Ignite, The Zell Entrepreneurship Program at Reichman University, Consiglieri , Nimrod Vromen, Alon Leibovich, Tal Brener, Liat Aaronson, Ori Schnitzer

𝐖𝐡𝐲 𝐭𝐡𝐞 𝐦𝐨𝐬𝐭 𝐜𝐨𝐦𝐩𝐚𝐧𝐢𝐞𝐬 𝐟𝐚𝐢𝐥 𝐢𝐧 𝐭𝐡𝐞𝐢𝐫 𝐚𝐭𝐭𝐞𝐦𝐩𝐭𝐬 𝐭𝐨 𝐫𝐚𝐢𝐬𝐞 𝐜𝐚𝐩𝐢𝐭𝐚𝐥? Here are 10 reasons: 𝟏.⁠ ⁠𝐈𝐧𝐬𝐮𝐟𝐟𝐢𝐜𝐢𝐞𝐧𝐭 𝐩𝐫𝐞𝐩𝐚𝐫𝐚𝐭𝐢𝐨𝐧: Many companies lack a well-defined strategy and are not adequately prepared to address investors' questions and concerns.  𝟐.⁠ ⁠𝐔𝐧𝐜𝐨𝐧𝐯𝐢𝐧𝐜𝐢𝐧𝐠 𝐩𝐫𝐞𝐬𝐞𝐧𝐭𝐚𝐭𝐢𝐨𝐧: The pitch is often poorly structured and fails to clearly communicate the business's value and potential.  𝟑.⁠ ⁠𝐔𝐧𝐫𝐞𝐚𝐥𝐢𝐬𝐭𝐢𝐜 𝐟𝐢𝐧𝐚𝐧𝐜𝐢𝐚𝐥 𝐩𝐫𝐨𝐣𝐞𝐜𝐭𝐢𝐨𝐧𝐬: Investors are skeptical of unrealistic or unsustainable long-term financial projections. 𝟒.⁠ ⁠𝐋𝐚𝐜𝐤 𝐨𝐟 𝐦𝐚𝐫𝐤𝐞𝐭 𝐮𝐧𝐝𝐞𝐫𝐬𝐭𝐚𝐧𝐝𝐢𝐧𝐠: Companies do not demonstrate a deep understanding of the target market, competition, and customer needs, making it difficult to convince investors of the business's viability.  𝟓.⁠ ⁠𝐋𝐚𝐜𝐤 𝐨𝐟 𝐭𝐫𝐚𝐜𝐭𝐢𝐨𝐧: Without evidence of traction or significant progress, investors may be reluctant to invest in the company.  𝟔.⁠ ⁠𝐈𝐧𝐞𝐱𝐩𝐞𝐫𝐢𝐞𝐧𝐜𝐞𝐝 𝐭𝐞𝐚𝐦: A management team without relevant experience or necessary skills may be seen as a major risk by investors. 𝟕.⁠ ⁠𝐔𝐧𝐜𝐥𝐞𝐚𝐫 𝐯𝐚𝐥𝐮𝐞 𝐩𝐫𝐨𝐩𝐨𝐬𝐢𝐭𝐢𝐨𝐧: If the product or service lacks a clear and differentiated value proposition, investors may be skeptical about the company's long-term success. 𝟖.⁠ ⁠𝐃𝐮𝐞 𝐝𝐢𝐥𝐢𝐠𝐞𝐧𝐜𝐞 𝐢𝐬𝐬𝐮𝐞𝐬: Problems discovered during the due diligence process, such as legal, financial, or operational issues, can lead to investors withdrawing. 𝟗.⁠ ⁠𝐈𝐧𝐞𝐟𝐟𝐢𝐜𝐢𝐞𝐧𝐭 𝐧𝐞𝐠𝐨𝐭𝐢𝐚𝐭𝐢𝐨𝐧: An inappropriate approach during negotiations can scare off investors or lead to unfavorable terms for the company. 𝟏𝟎.⁠ ⁠𝐋𝐚𝐜𝐤 𝐨𝐟 𝐧𝐞𝐭𝐰𝐨𝐫𝐤𝐢𝐧𝐠: Companies without well-developed networks may struggle to reach the right investors and establish trustful relationships. Now you have the chance to learn how to avoid these mistakes and raise the money you need as soon as you are ready. 𝐂𝐥𝐢𝐜𝐤 𝐭𝐡𝐞 𝐥𝐢𝐧𝐤 below and benefit from the program specially designed by me, based on the experience I have accumulated with over 100 startups. https://lnkd.in/dVGfvEb7 𝐒𝐭𝐚𝐫𝐭𝐢𝐧𝐠 𝐨𝐧 𝐀𝐮𝐠𝐮𝐬𝐭 𝟏𝐬𝐭, 𝐭𝐡𝐞 𝐩𝐫𝐢𝐜𝐞 𝐰𝐢𝐥𝐥 𝐢𝐧𝐜𝐫𝐞𝐚𝐬𝐞 𝐛𝐲 𝟓𝟎%. 𝑹𝒆𝒎𝒆𝒎𝒃𝒆𝒓: 𝑭𝒖𝒏𝒅𝒓𝒂𝒊𝒔𝒊𝒏𝒈 𝒊𝒔 𝒂 𝒔𝒌𝒊𝒍𝒍 𝒕𝒉𝒂𝒕 𝒆𝒗𝒆𝒓𝒚 𝒆𝒏𝒕𝒓𝒆𝒑𝒓𝒆𝒏𝒆𝒖𝒓 𝒎𝒖𝒔𝒕 𝒍𝒆𝒂𝒓𝒏! 𝐅𝐨𝐥𝐥𝐨𝐰 𝐦𝐞, Andreea Marinescu, for more insights on how to raise capital in 2024 more easily and smartly, because we know that 𝐬𝐦𝐚𝐫𝐭 𝐦𝐨𝐧𝐞𝐲 𝐢𝐬 𝐦𝐨𝐫𝐞 𝐢𝐦𝐩𝐨𝐫𝐭𝐚𝐧𝐭 𝐭𝐡𝐚𝐧 𝐣𝐮𝐬𝐭 𝐦𝐨𝐧𝐞𝐲.

CEOs and Investors: Let’s get together In-Person We’re hosting a new IN-PERSON event, and we’d love to see you there. Join us for CEO- Investor Forum by Pismo Ventures and Withum, January 31, 2024 at 5:30 PM. The CEO-Investor Forum is designed to facilitate connections and collaboration between CEOs and investors to breakdown barriers, foster open communication and build relationships. It is educational with the objective to help founders navigate their startup journey. • Presentation by Withum on Qualified Small Business Stock • Investor Panel: Xandra Laskowski (OSEA Angels), Pat Hwang (Tech Coast Angels), Greg Buchert, MD (MEDA Angels), and Jeff Bocan (Okapi Capital VC) - moderated by JJ Richa (Pismo Ventures) • Pitch event: Only 7 startups will pitch chosen from the first 15 applications Founders and CxOs of scalable startups looking for Investors, VCs, and Angels and to learn more about what it takes to build and grow your business, Register soon because space is limited. Investors, Angels, VCs, and Family Offices join us to meet startups and entrepreneurs. Register soon because space is limited. #startups #startups #entrepreneurs #angels #investors #VCs #capitalraise #investing #founders